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Watchdog savages hospital cost hikes

THE NATIONAL Audit Office highlighted a 'history of cost escalations' on major NHS building jobs in its highly critical report into the Paddington Health Campus last week.

The public spending watchdog attacked a lack of leadership, organisation and vision on the project, which saw costs almost treble from an initial £300 million to a massive £894 million, before the scheme was finally axed a year ago.

The Department of Health data gathered by the NAO showed major £75 millionplus health projects more than doubling in cost from outline business case to planning and construction.

The report said: 'A major project risk affecting affordability is the history of cost escalation for large NHS schemes.

All large NHS capital schemes cost significantly more than their initial outline business case. For major schemes either in planning or build stage, the average cost increase above the original estimate is 117 per cent.' The NAO said the scheme to replace three run-down hospitals in north London failed because the partners in the project ? Imperial College, St Mary's NHS Trust and Royal Brompton and Harefield NHS Trust ? failed to secure enough land for the development after securing outline business approval.

The watchdog also criticised the lack of a single leader for the project and the failure to advertise it in the Official Journal, denting market confidence in the scheme.

The fiasco cost the taxpayer £15 million and the NAO said that the partners should have drawn up a new business case for the project ? or axed it ? in 2003.